Zcash Archives

Bitcoin Technology is Improving

Posted on March 8, 2018 | by [email protected]

While cryptocurrency prices have seen their fair share of volatility, the underlying technologies supporting the industry continues to grow immensely, demonstrate innovation, and solve problems. Specifically, technological advancements in the areas of privacy, off-chain solutions, and exchanges are signs of a cryptocurrency industry with a bright future ahead.

Privacy

The initial iteration of blockchain privacy has left many people scratching their heads as to why anyone would ever want their financial transactions published for the world to see. But the advent of zero-knowledge proofs are beginning to change this narrative, as they allow transactions to be validated without any information of the transaction itself being made public. This method of privacy, which is currently being used by ZCash and is being developed by Ethereum, has been thoroughly researched in order to prove its validity as a method for increased privacy.

There are other technological advancements arriving on the scene that are dedicated to making user privacy a priority. Coinjoin technology gives the option to join multiple transactions together making it impossible to tell the transaction origination and destination wallets. Homomorphic encryption, or a method of performing calculations on encrypted information without decrypting it first, has been proposed as a way to prevent privacy problems that occur when dealing with sensitive, unencrypted data. Although still in the theoretical phase, this technology is projected to be utilized for practical, mainstream usage in the not-too-distant future.

Off-chain Solutions

Two large challenges for blockchain technology are speed and scalability, and developers are actively working on addressing both. Payment processors such as Visa can conduct thousands of transactions per second at high speeds, while the legacy Bitcoin blockchain can only conduct 4-7 transactions per second. Because of this, Bitcoin has had trouble scaling at the enterprise level, but an array of off-chain solutions are being implemented to help create blockchains that can transact without capacity or speed limitations.

The Bitcoin Lightning Network has been widely regarded as a game-changing innovation that could take the cryptocurrency to the next level. Powered by smart contracts, the Lightning Network allows payments to be settled off-chain by way of payment channels where users transact. The blockchain isn’t used in every transaction and is instead only called upon to settle disputes and when payment channels are closed.

Ethereum is working with a similar off-chain solution, the Raiden Network, which promises instant, low-fee transactions to work in conjunction with the Ethereum blockchain. Compatible with the ERC20 token, the Raiden Network takes away the need for global consensus and allows Ethereum smart contracts to be processed off-chain and settled on the blockchain when needed.

Bright Horizons Ahead

Although the cryptocurrency industry has dealt with its fair share of volatility in recent months, the technology powering the space has grown immensely and will only continue to grow steadily with the help of dedicated teams working to accommodate the over 20 million digital wallets being used by consumers and businesses around the world. This puts blockchain technology and cryptocurrencies on track to do great things in 2018 and beyond.

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Bitcoin Might Lose Cloak of Anonymity to 2 New Upstarts

Posted on November 9, 2016 | by [email protected]

Bitcoin has risen to international prominence as an alternative to fiat currencies because it provides a degree of privacy not found in fiat currencies. You don’t need to reveal your name or any other details of your personal identity when you use Bitcoin for transactions. In fact, transaction details are converted into a string of letters and numbers designed to protect the identity of both buyers and sellers.

The anonymity cloak helps to keep Bitcoin decentralized and devoid of government control or interference. However, Bitcoin transactions are not completely anonymous because each transaction is recorded permanently in a public ledger. Now, Bitcoin users have to grapple with the reality that modern investigative and analytic techniques have started to make it possible to peel away the covers of anonymity in Bitcoin transactions.

Sadly, the fact that Bitcoin might not be as anonymous as previously imagined is already causing the emergence of new cryptocurrencies with better cloaks of anonymity. This article examines two of the latest Bitcoin wannabes.

Meet Zcash, offering confidential transactions

Zcash is a new cryptocurrency launched last month as ” an open and programmable financial system” that has a special focus on privacy because “companies need privacy in order to conduct their business; and we believe that privacy strengthens social ties and social institutions, protects societies against their enemies, and helps societies to be more peaceful and more prosperous. ”

Zcash’s emphasis on privacy has made it an overnight success causing the value of a unit ZES to rise all the way to $5000 soon after the launch last Friday—it has since settled to about $500. Interestingly, the founders of Zcash admit that the cryptocurrency’s emphasis on privacy could make it a choice means of exchange for illegal activities in much the same way that Bitcoin was the defacto legal tender on Silk Road before it was shut down.

Nonetheless, the Zcash founders have generalized that

“bad guys will use anything. Bad guys use cars, bad guys use the Internet, bad guys use cash, bad guys use the current banking system. Our goal is not to invent something that bad guys can’t use, it is to invent something that can empower and uplift the billions of good people on this planet.”

Zcash Genesis Block

Meet Monero, offering untraceable transactions

Monero is a cryptocurrency that claims to be “secure, private, untraceable currency. It is open-source and freely available to all.” The main selling point of Monero is that transaction details are kept private in sharp contrast to Bitcoin where transactions are stored in a public ledger.

Monero also goes to great lengths to ensure that transactions cannot be traced to any user by leveraging ring signatures, which are a group of cryptographic signatures with at least one real participant, thereby making it practically impossible to know the person who spent or receive funds.

Monero – How it works and Current Market Status

Final words…

However, both Zcash and Monero are still in their early days and it is somewhat hasty to pronounce any judgment on how they are likely to fare against Bitcoin. Bitcoin enjoys a first-mover advantage in the cryptocurrency market and it is not likely to cede marketshare over to newcomers overnight. More so, Bitcoin is time-tested and proven after withstanding series of mishaps that could have rendered it useless as a currency.

More importantly, Bitcoin has been able to find fair value against the U.S. dollar after it went through some impressive skyrocketing and crashes in its value. Hence, people are more likely to use Bitcoin for the stability it offers instead of going through the stages of acceptability with every new currency that debuts.

What is making Zcash the new talk of the town?

Posted on November 7, 2016 | by [email protected]

The advent of Bitcoin has given rise to many cryptocurrencies commonly known as ‘altcoins’. Out of the set of altcoins that have come to light, Zcash is the latest one. The cryptocurrency was launched on 28^th October with the first block mining on Friday. The launch was originally scheduled a month ago but due to technical reasons, the launch was delayed adding to all the hype. The currency is endorsed to provide high levels of privacy which has been the shortcoming of many altcoins and Bitcoin. Let’s look into what actually is making Zcash the new sensation:

How Zcash works:

Cryptographic experts and scientists holding positions at John Hopkins University, MIT and Tel Aviv University developed Zcash. Over the past four years, they have developed this algorithm which leaves zero knowledge proofs for any transaction. According to their white paper of the algorithm, the transaction hides the payment’s origin, destination and transferred amount. Major Blockchain based cryptocurrencies have public address which can be related to the users(Senders and Receivers). However, in Zcash for all the transactions, there is a hash (a random set of letters) in place of addresses hiding the identity of senders and receivers. Hence no amount, no addresses are shown thereby ensuring the privacy of the transaction.

Market Performance:

The launch dynamics of the cryptocurrency were hysteric with speculations about the currency loading up. This was a delayed launch and press releases gave the currency much needed boost for its start. Within 40 minutes of trading, a high of 3,299 bitcoins to one Zcash (ZEC) was recorded. This high is equivalent to $2.3 million for each Zcash coin. Then the price fell steadily after that and finally settled below the price of Bitcoin. Zcash finally found support at $510 levels making it one of the most valuable cryptocurrency. It so far has around 3000 coins available in the market with no solid wallet system or networking system aiding the transfers. How Zcash would fare with building infrastructure would be an interesting journey to follow.

Zcash vs Bitcoin and Altcoins:

While the basic framework of all these cryptocurrencies is Blockchain, Zcash’s anonymity is certainly a unique selling point.

“Many such ‘altcoins’ are dubious affairs and don’t add much. But this one brings important innovations.”

– The Economist

Zcash has the same level of security as Bitcoin. But unlike bitcoin, the new currency continues the quest for one thing in the blockchain space: full and complete privacy. Although this was promised by Bitcoin, Monero, as well as tumblers and mixers the attempts went in vain. How practically executable and anonymous the protocol of Zcash would be seen with time.